XML 48 R18.htm IDEA: XBRL DOCUMENT v3.24.1.u1
Segment Reporting:
 3 Months Ended
Mar. 31, 2024
Segment Reporting [Abstract]  
Segment Reporting: Segment Reporting:
PMI’s subsidiaries and affiliates are primarily engaged in the manufacture and sale of cigarettes and smoke-free products, including heat-not-burn, e-vapor and oral nicotine products. Excluding the Wellness and Healthcare segment, PMI's segments are generally organized by geographic region and managed by segment managers who are responsible for the operating and financial results of the regions inclusive of combustible tobacco and smoke-free product categories sold in the region. As discussed in Note 1. Background and Basis of Presentation, PMI updated in January 2024 its segment reporting by including the former Swedish Match segment results into the four existing geographical segments. The four existing geographical segments are as follows: Europe Region; South and Southeast Asia, Commonwealth of Independent States, Middle East and Africa Region ("SSEA, CIS & MEA"); East Asia, Australia, and PMI Duty Free Region ("EA, AU & PMI DF"); and Americas Region. The Wellness and Healthcare segment remained unchanged.

PMI’s chief operating decision maker evaluates geographical segment performance and allocates resources based on regional operating income, which includes results from all product categories sold in each region, excluding Wellness and Healthcare products. Business operations in the Wellness and Healthcare segment are evaluated separately.

PMI disaggregates its net revenues from contracts with customers by product category for each of PMI's four geographical segments. For the Wellness and Healthcare business, Vectura Fertin Pharma, net revenues from contracts with customers are included in the Wellness and Healthcare segment. PMI believes this best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors.
Segment data were as follows:
(in millions)For the Three Months Ended March 31,
20242023
Net revenues:
Europe$3,365 $3,068 
SSEA, CIS & MEA
2,658 2,477 
EA, AU & PMI DF
1,684 1,520 
Americas996 868 
Wellness and Healthcare90 86 
Net revenues$8,793 $8,019 
Operating income (loss):
Europe$1,456 $1,215 
SSEA, CIS & MEA
772 734 
EA, AU & PMI DF
763 637 
Americas99 183 
Wellness and Healthcare(45)(38)
Operating income$3,045 $2,731 

PMI's net revenues by product category were as follows:
(in millions)For the Three Months Ended March 31,
20242023
Net revenues:
Combustible tobacco:
Europe$1,931 $1,815 
SSEA, CIS & MEA
2,346 2,154 
EA, AU & PMI DF
597 689 
Americas534 566 
Total combustible tobacco5,407 5,223 
Smoke-free:
Smoke-free excluding Wellness and Healthcare:
Europe1,434 1,253 
SSEA, CIS & MEA
312 323 
EA, AU & PMI DF
1,087 831 
Americas462 302 
Total Smoke-free excluding Wellness and Healthcare3,296 2,710 
Wellness and Healthcare90 86 
Total Smoke-free3,386 2,796 
Total PMI net revenues$8,793 $8,019 
Note: Sum of product categories or Regions might not foot to total PMI due to roundings.
Items affecting the comparability of results from operations were as follows:

•Asset impairment and exit costs – See Note 15. Asset Impairment and Exit Costs for a breakdown of these costs by segment for the three months ended March 31, 2024 and 2023.
•Termination of distribution arrangement in the Middle East – In the first quarter of 2023, PMI recorded a pre-tax charge of $80 million following the termination of a distribution arrangement in the Middle East. This pre-tax charge was recorded as a reduction of net revenues in the condensed consolidated statements of earnings, and was included in the SSEA, CIS & MEA segment results for the three months ended March 31, 2023.
•Swedish Match AB acquisition accounting related items – In the first quarter of 2023, PMI recorded $18 million pre-tax purchase accounting adjustments related to the sale of acquired inventories stepped up to fair value included in the Americas segment.

Net revenues related to combustible tobacco refer to the operating revenues generated from the sale of these products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes. These net revenue amounts consist of the sale of PMI's cigarettes and other tobacco products that are combusted. Other tobacco products primarily include roll-your-own and make-your-own cigarettes, pipe tobacco, cigars and cigarillos, and do not include smoke-free products.

Net revenues related to smoke-free, excluding wellness and healthcare, refer to the operating revenues generated from the sale of these products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes, if applicable. These net revenue amounts consist of the sale of PMI's products that are not combustible tobacco products, such as heat-not-burn, e-vapor, and oral products, as well as consumer accessories.

Net revenues related to wellness and healthcare consist of operating revenues generated from the sale of products primarily associated with inhaled therapeutics, and oral and intra-oral delivery systems that are included in the operating results of PMI's Wellness and Healthcare business, Vectura Fertin Pharma.